Economic Policy and Market Outlook - Recent economic policies, including structural interest rate cuts, are expected to support economic growth, potentially leading to a "good start" in the first quarter of 2026, although final performance will depend on forthcoming data [5] - The financial market policies have moderated previously overheated sectors, indicating that the market may not sustain its rapid upward trend and could transition into a more volatile phase [5] Fund Market Trends - The Hong Kong stock market saw an overall increase, while domestic equity markets experienced fluctuations; TMT-themed funds performed well, whereas defense and military-themed funds faced net value declines [5] - There was a notable reduction in passive fund holdings across various broad-based ETFs, with over 130 billion yuan flowing out of large-cap ETFs, while TMT and cyclical theme ETFs attracted over 60 billion yuan in net inflows [5] Economic Data Insights - The economic landscape in 2025 is characterized by a "high before low" trend, with supply outpacing demand and external demand exceeding internal demand [6] - In December 2025, industrial production growth rates increased year-on-year and month-on-month, while fixed asset investment saw a widening decline, and retail sales growth continued to decrease [6] Oil and Geopolitical Factors - Heightened geopolitical tensions in Iran have increased the geopolitical risk premium on oil, contributing to rising oil prices; as of January 16, 2026, Brent and WTI crude oil prices were reported at $64.20 and $59.22 per barrel, reflecting increases of 1.9% and 0.7% respectively [7] - The ongoing international instability is likely to provide a favorable foundation for oil price trends in the long term [7] Infrastructure Investment - The State Grid has announced a planned fixed asset investment of 4 trillion yuan during the 14th Five-Year Plan period, marking a 40% increase compared to the previous plan, focusing on power grid and energy storage sectors [8] - Key projects for 2026 will concentrate on ultra-high voltage and pumped storage, indicating potential opportunities in power infrastructure orders and renewable energy consumption [8] Power Consumption and Digitalization - In 2025, the total electricity consumption in society increased by 5.0% year-on-year [9] - The State Grid's investment in new power systems is expected to enhance capacity pricing, with projected capacity prices for 2026 estimated at 6.3 cents per kilowatt-hour, a 4-cent increase from the previous year [9] Pharmaceutical Sector Innovations - The pharmaceutical and biotechnology sectors are experiencing a surge driven by innovation, including overseas expansion, AI applications, and new technologies, alongside policy support and seasonal market dynamics [9] - Key focus areas include innovative drugs, CXO services, AI healthcare, brain-computer interfaces, and small nucleic acid drugs, with ongoing attention required on post-JPM conference collaborations and clinical data outcomes [9]

Market Performance Overview - The Hong Kong stock market experienced an overall increase, while the domestic equity market showed mixed fluctuations, with the CSI 500 index rising by 2.18% during the week from January 12 to January 16, 2025 [4] - Among the Shenwan first-level industry indices, the computer, electronics, and non-ferrous metals sectors had the highest gains, while the defense, real estate, and agriculture sectors faced the largest declines [4] Fund Product Issuance - A total of 23 new funds were established in the domestic market this week, with a combined issuance of 19.294 billion units. This included 10 equity funds, 3 bond funds, 7 mixed funds, 1 international (QDII) fund, and 2 FOF funds [5] - Overall, 36 new funds were issued across the market, comprising 17 equity funds, 12 mixed funds, 4 bond funds, and 3 FOF funds [5] Fund Product Performance Tracking - The TMT thematic funds showed strong performance this week, while the defense and military industry thematic funds experienced a net value decline. As of January 16, 2026, the net value changes for various thematic funds were as follows: TMT (3.98%), cyclical (2.08%), industry balanced (1.56%), industry rotation (1.30%), new energy (0.81%), consumption (-0.76%), pharmaceuticals (-1.08%), financial real estate (-1.45%), and defense military (-2.71%) [6] ETF Market Tracking - There was a noticeable profit-taking phenomenon in the stock ETF market, with over 130 billion yuan flowing out of various broad-based ETFs. In contrast, thematic ETFs, particularly TMT and cyclical ETFs, attracted significant inflows, totaling over 60 billion yuan [7] - The median return for stock ETFs this week was 0.55%, with a net outflow of 142.72 billion yuan. The median return for Hong Kong stock ETFs was 2.08%, with a net inflow of 10.824 billion yuan [7] - Commodity ETFs had a median return of 2.86%, with a net inflow of 2.988 billion yuan [8] ESG Financial Products Tracking - This week, 21 new green bonds were issued, with a total issuance scale of 11.811 billion yuan. The domestic green bond market has steadily developed, with a cumulative issuance scale of 5.21 trillion yuan and a total of 4,502 bonds issued as of January 16, 2026 [9] - The domestic market currently has 211 ESG funds, with a total scale of 159.744 billion yuan. The median net value changes for various ESG fund types this week were: active equity (1.56%), passive equity index (0.32%), and bond ESG funds (0.06%). Funds focused on clean energy, green initiatives, and low-carbon economy themes performed particularly well [9]